Correlation Between Needham Aggressive and Vaughan Nelson
Can any of the company-specific risk be diversified away by investing in both Needham Aggressive and Vaughan Nelson at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Needham Aggressive and Vaughan Nelson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Needham Aggressive Growth and Vaughan Nelson International, you can compare the effects of market volatilities on Needham Aggressive and Vaughan Nelson and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Needham Aggressive with a short position of Vaughan Nelson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Aggressive and Vaughan Nelson.
Diversification Opportunities for Needham Aggressive and Vaughan Nelson
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Needham and Vaughan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Needham Aggressive Growth and Vaughan Nelson International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaughan Nelson Inter and Needham Aggressive is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Needham Aggressive Growth are associated (or correlated) with Vaughan Nelson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaughan Nelson Inter has no effect on the direction of Needham Aggressive i.e., Needham Aggressive and Vaughan Nelson go up and down completely randomly.
Pair Corralation between Needham Aggressive and Vaughan Nelson
Assuming the 90 days horizon Needham Aggressive Growth is expected to generate 1.29 times more return on investment than Vaughan Nelson. However, Needham Aggressive is 1.29 times more volatile than Vaughan Nelson International. It trades about 0.09 of its potential returns per unit of risk. Vaughan Nelson International is currently generating about 0.03 per unit of risk. If you would invest 3,034 in Needham Aggressive Growth on September 13, 2024 and sell it today you would earn a total of 2,146 from holding Needham Aggressive Growth or generate 70.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Needham Aggressive Growth vs. Vaughan Nelson International
Performance |
| Timeline |
| Needham Aggressive Growth |
| Vaughan Nelson Inter |
Needham Aggressive and Vaughan Nelson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Aggressive and Vaughan Nelson
The main advantage of trading using opposite Needham Aggressive and Vaughan Nelson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Aggressive position performs unexpectedly, Vaughan Nelson can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Vaughan Nelson will offset losses from the drop in Vaughan Nelson's long position.| Needham Aggressive vs. Needham Aggressive Growth | Needham Aggressive vs. Needham Small Cap | Needham Aggressive vs. Ultramid Cap Profund Ultramid Cap | Needham Aggressive vs. Fidelity Advisor Semiconductors |
| Vaughan Nelson vs. Advisory Research Emerging | Vaughan Nelson vs. Advisory Research International | Vaughan Nelson vs. Vaughan Nelson Emerging | Vaughan Nelson vs. Nuveen Santa Barbara |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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